Loot is purely individual. It only drops for you. Your allies can't see it, and you can't see theirs.
When you pick up and engram you can see what type it is based off its picture, ie. helmet, gloves, chest, weapon, etc. Furthermore you can view the engram in your inventory with other items of the same type: helmet engram will be in your inventory with all of your helmets.
From my experience I only saw engrams drop in world and from the cryptarch. Chests and crucible match rewards come identified already and so are not technically engrams.
Cryptarch rank, as far as I know, may change what engrams are available for purchase (I'm not sure on this) but every few ranks he will send you an engram and some glimmer. People have acquired rare and legendary engrams this way.
English
-
Crypt arch rank does effect engrams dropped in the world, as far as I can tell at least. My crypt arch was rank 8 and I got a few rare engram drops somewhere along the line.
-
Thanks. Most of what you say meshes with how I [i]think[/i] it works. I have, however, received engrams at the end of a Crucible match. I'm pretty sure, but not positive I've gotten them from chests. I really think the spawning of items is pretty much random.